With the debate around THC flaring up in Waseca, one local business is prepared to continue its work as one of the biggest THC and CBD producers in the state.
Midwest Extraction, whose building is located just across the street from the new Conagra Brands plant, began in 2019 between co-owners Matthew Little and Garth Carlson. At the time, Little said the idea was to be like “the intel in the computers, with our oil being in a bunch of different products.”
But directions have changed, and with CBD becoming a more viable product than ever locally, the business aims to lead the way in Minnesota.
Little was born and raised in Rapidan, near Mankato. After high school, he attended Minnesota State University, Mankato for electrical engineering. Little said his fascination surrounding CBD began in 2004.
“I had back surgery in 2004 or 2005 after falling off a roof, and two weeks after I rolled a snowmobile. … I have pain, and so I’m back on Oxycodone,” Little said in a previous interview with the Waseca County News.
According to Little, he has an addictive personality, and out of concern, his wife asked him to try CBD instead of his pain meds. He says he took a hit, looked at his wife and business partner, and said, “Guys, I don’t have any pain.”
The journey started from there for the duo, and it led to the opening of what would become Midwest Extraction Services in 2019.
“We were farmers, and we grew around 650 acres while we were building Midwest in 2019. In [quarter one] of 2020, we started doing extraction,” Little said. Once Little and Carlson began extraction, Little said the goal was to become vertically integrated, or, “to go from seed to shelf.”
They accomplished that goal in 2021 with the addition of a production line.
While the original goal was to make Waseca, “the hemp capital of the world”, Little said the goal has now changed, and Midwest Extraction has found a new goal: cornering the THC market.
On July 1, the Minnesota Legislature passed a bill allowing edible and non-edible products containing no more than five milligrams of THC, the chemical in marijuana that gives people a high, to be sold in the state.
“The July bill was definitely a big factor for us,” Little said. “We saw the market beginning to change, and as business owners, when the market changes, you have to pivot. … So the market changed and we pivoted.”
When the law changed, Midwest Extraction Services began producing a number of THC products — primarily gummies and water-soluble tablets. In just a short amount of time, Midwest Extraction Services has grown to become a large distributor of THC products, both in the state and across the country.
Little estimates that Midwest Extraction Services is the largest THC product supplier in the state, and that they are one of the 10 largest in the country. Their distribution market extends from South Dakota to Wisconsin and down to Iowa.
He said Midwest’s Minnesota-grown mindset is a rarity in the immature THC market.
“We’re one of the only products that are grown here, made here and distributed here,” Little said, adding that many companies claiming to be Minnesota-grown will actually buy their oil from out-of-state.
The “immature” THC market, as Little puts it, has opened the door for some bad actors in the market. As part of a tour of the facility, Little showcased the testing lab of Midwest Extraction Services, where they quality check all their products and test competitors products to see if their products are within the legal limit.
Companies are required to submit a certificate of analysis when requested, showing that their products are within the 5-milligram allowance. However, Little and Johanna Holloway, the technician in the testing lab, said a large swath of the COAs they receive have been altered.
“Photoshopped documents, that’s the biggest problem,” Holloway said. She estimates that around 60-70% of the COAs that Midwest Extraction Services receive are altered, with one product containing nearly 15 milligrams of THC, instead of the legal limit of 5.
These bad faith practices have left many, Little included, hoping for more regulation in the market. Little said his main concern with companies putting a higher amount of THC in their gummies than what is allowed for the consumer.
“Imagine you buy our gummies, which are at 5 milligrams a gummy, and you know you can take two and have a fun night. … But maybe you’re out of state, and can’t buy our gummies, and without knowing it, you buy one that’s 15 milligrams per gummy. You’re not going to have a good night,” Little said, “It’s the difference between a shot of tequila and drinking the whole bottle.”
As for what kind of regulation he’d like to see, Little said “Iowa’s got it right.”
“In Iowa, we have to register as a THC distributor in the state. We have to get a license; the fee is around $450, and that money goes to the law enforcement agencies who test the products,” Little said.
He compared the THC industry to the alcohol industry, saying that he hopes to see the same amount of regulation in this new market.